Companies’ biggest tax worry for 2010?

The burden on their international operations.

According to a survey published this week by Washington, D.C.-based law firm Miller & Chevalier, close to 40 percent of corporate executives and managers say that taxation of their company’s global activities is their top business tax concern. (About 47 percent of the respondents were directors or managers of tax.)

Nervousness over the international tax outlook even beat out concern about managing the effective tax rate (ETR), traditionally the be-all-end-all at many organizations. ETR was named the top tax issue by 36.5 percent of respondents.

President Obama may have toned down some aspects of his international tax program in his 2011 budget, as I noted here, but clearly finance and tax pros are far from being reassured. A chorus of respondents’ comments decried the lack of any quid pro quo in the form of a reduction in the corporate income tax rate:

• “US corporate rates should be lowered and a consideration given to changing to an exemption-style territorial tax system so that the U.S. corporate system more closely resembles [that of]the rest of our international competitors.”

• “Reduce the corporate tax rate, but not if the base is broadened so much that corporate tax liabilities, especially from international operations, actually increase.”

Survey participants are anxious about increased IRS attention to overseas activities, too. More than three-quarters think thatCongress will press for more IRS scrutiny of tax returns in this area.

The Miller & Chevalier study also provides some fascinating insights into business leaders’ views on some other tax policy issues, including their expectations for upcoming legislation and their attitudes toward tax reform. It’s available here. ###